CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. UK Government To Close Tonnage Tax Loophole

UK Government To Close Tonnage Tax Loophole

by Robert Lee, Tax-News.com, London

24 December 2002


UK Paymaster General, Dawn Primarolo on Thursday announced that Chancellor Gordon Brown's next Finance Bill will contain provisions closing a loophole in the country's tonnage tax regime.

Tonnage tax was introduced in 2000 as an optional regime available to ship owners, whereby they can have their corporate tax liability calculated by reference to the tonnage of the ships which they operate, rather than by the profits generated by their enterprise. The measure was intended to boost the country's shipping industry.

However, in a statement released last week, Ms Primarolo explained that:

'In order to place a check on the cost of the tonnage tax, there are rules that restrict the amount of capital allowances that can be claimed by a lessor for expenditure on a ship that is used for activities within the tonnage tax. These rules apply only to finance leases.'

'Some lessors are, however, now offering long-term leases for ships that have many of the characteristics of finance leases without being finance leases in form. Such leases can be used to allow lessors to claim significantly more in capital allowances than had been intended when the tonnage tax was introduced.'

According to the statement, draft legislation containing provisions to extend the types of leases to which the restrictions apply will be issued shortly, and will undergo a consultation process.


To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »